(Bloomberg) -- The Netherlands received strong investor demand for the world’s first green bond issue by a AAA-rated nation, highlighting the burgeoning appetite for environmentally-friendly securities.
The nation sold six billion euros ($6.7 billion) of 20-year securities, having received over 21 billion euros of orders from investors. The amount sold was at the top end of the four-to-six-billion-euro estimate provided by the Dutch Treasury beforehand.
Green sovereign bond issues have grown in popularity over the last few years after Poland became the first nation in 2016 to do so. France, Belgium and Ireland have also sold bonds that allocate the proceeds to environmentally-friendly causes, while Germany is weighing up a similar move as early as next year, according to reports.
“It is an encouraging sign for further sovereign green bond deals,” said Antoine Bouvet, an interest-rate strategist at Mizuho International Plc. “We expect France to conduct a syndicated tap of its green OAT, perhaps as early as June.”
The Dutch green bond offered a coupon of 0.5%, compared to a current yield of around 0.4% for conventional 20-year bonds. Dutch bonds have climbed this year to push benchmark 10-year yields toward zero as investors have bought haven assets amid stalling inflation and geopolitical risks.
A cumulative $580 billion of green bonds were sold through 2018, and another $170 billion to $180 billion are likely to be sold this year, according to Bloomberg New Energy Finance.